Original Title: Notice Issued by the People’s Government of Ningbo Municipality on Several Measures to Promote the Sustainable and High-Quality Development of Equity Investment in Ningbo
Ningbo Government Document [2023] No. 79
Document Status: Valid
Registration Number of Normative Document: ZJBC00-2023-0006
To the People’s Governments of All Districts (Counties, Cities), and All Municipal-Level, Ministry-Level, and Provincial-Level Units Stationed in Ningbo:
The "Several Measures for Promoting the Sustainable and High-Quality Development of Equity Investment in Ningbo" is hereby issued to you. All localities must attach great importance to this matter and formulate targeted policies and plans to promote the development of local equity investment institutions. Relevant municipal departments must strengthen coordination and cooperation to ensure the effective implementation of all tasks.
Ningbo Municipal People’s Government
December 12, 2023
(This document is publicly released)
Yong Zheng Fa (2023) No. 79.pdf
Several Measures for Promoting the Sustainable and High-Quality Development of Equity Investment in Ningbo
To further strengthen top-level design, invigorate the capital market, promote the specialized, clustered, and scaled development of the city’s equity investment industry, stimulate financial innovation, and enhance new drivers of economic growth, the following measures are formulated in light of the city’s actual conditions.
I. Encourage investment in early-stage, small-scale, and technology-based enterprises. Support and guide equity investment institutions to increase their support for early-stage technology-based enterprises. Equity investment institutions that have invested in early-stage technology-based enterprises in this city for a full two years will be granted a reward equivalent to 10% of the actual investment amount (limited to monetary contributions).
II. Support equity investment institutions in investing in Ningbo. For every 100 million yuan (or equivalent in foreign currency) of actual investment made by an equity investment institution in non-listed enterprises within the city during the current year, provided the investment has been held for at least one year, a one-time reward of 1 million yuan will be granted. Detailed reward rules for investment amounts exceeding 2 billion yuan in the current year will be formulated separately. We aim to ensure that the total amount of equity investment directed toward our city exceeds 200 billion yuan by 2027.
III. Promoting the “Dual Attraction of Capital and Industry.”We will promote the “chain leader + fund” investment promotion model and conduct targeted investment promotion campaigns for leading global equity investment institutions. We encourage equity investment institutions to introduce enterprises from their ecosystems to settle in our city. If a settled enterprise submits its initial public offering (IPO) application materials within three years, the equity investment institution will receive a one-time reward of 3 million yuan, with an additional 2 million yuan awarded upon the enterprise’s successful listing; if the settled enterprise is a listed company, the equity investment institution will receive a one-time reward of 5 million yuan.
IV. Guide Investment Toward Key Industries and Infrastructure Sectors. Support equity investment institutions in directing investments toward key sectors such as high-end intelligent manufacturing, the green economy, future industries, and modern services. Increase investment in key infrastructure sectors and explore the establishment of a municipal-level infrastructure investment fund. Establish a cooperation and coordination mechanism between universities, research institutes, and equity investment institutions to achieve synergy between capital and innovation and entrepreneurship. Develop industrial merger and acquisition funds to support listed companies in conducting horizontal mergers, vertical integration acquisitions, and global industrial chain integration across the upstream and downstream of industrial chains.
V. Optimize the fiscal and state-owned capital fund system. Leverage the catalytic effect of fiscal funds to concentrate resources on major initiatives; further integrate various types of fiscally funded funds, expand their scale, and guide diverse social capital to invest in key sectors and underdeveloped areas of our city’s economic and social development. Build an industrial fund cluster with a total scale of 300 billion yuan. Promote the coordinated development of industrial development funds, venture capital guidance funds, and angel investment guidance funds; strengthen cooperation among various government investment funds at the municipal and county levels to create a government investment fund system that integrates vertical and horizontal dimensions.We will expand and strengthen state-owned capital funds, build a “1+N+X” state-owned capital fund cluster, and leverage the industrial investment attraction and capital aggregation functions of state-owned capital funds through “investment-driven guidance.”
VI. Attracting Social Capital to Collaborate on Angel Investment Development. Encourage angel investment guidance funds to partner with social capital to establish market-oriented angel investment sub-funds. Support appropriate relaxation of capital contribution limits and reinvestment requirements for angel investment guidance funds; the cumulative contribution ratio of an angel investment guidance fund in a single sub-fund may be relaxed to 40% of the sub-fund’s total committed capital, and the combined contribution ratio limit for multiple government guidance funds in a single sub-fund may be further relaxed.Improve the incentive mechanisms for equity participation in sub-funds and encourage angel investment sub-funds to invest in seed-stage and early-stage enterprises in our city.
VII. Improve the error-tolerance and correction mechanism for government investment funds.Coordinate policy requirements across state-owned asset management, audit supervision, financial regulation, and investment promotion with the practical realities of market-oriented operations of state-owned enterprises, and optimize institutional designs regarding risk tolerance, transaction pricing, performance evaluation, and investment loss assessment. Encourage government investment fund management institutions and state-owned equity investment institutions to implement more effective personnel incentive mechanisms, establish and improve equity holding and co-investment mechanisms for state-owned equity investment institutions and their core teams, and relax restrictions on employee equity holding ratios for newly established equity investment institutions.
VIII. Encourage the Scaled Development of Investment Institutions. Equity investment management institutions whose actual fund management scale reaches 3 billion yuan, 5 billion yuan, or 10 billion yuan (or the equivalent in foreign currency) for the first time will be awarded 1 million yuan, 3 million yuan, and 5 million yuan, respectively.For equity investment funds with operating revenue (including investment income) of 200 million yuan or more in the previous fiscal year and a year-on-year growth of 10% or more, or with total profits of 100 million yuan or more, 80% of the municipal portion of the local comprehensive contribution generated from project exits in the previous year will be allocated to the district (county, city) where the fund is located. For investments in local enterprises totaling 100 million yuan or more, the allocation ratio may be increased to a maximum of 100%.The goal is to have more than 30 investment institutions with assets under management of 5 billion yuan or more by 2027.
IX. Building a Hub for Cross-Border Trade and Investment. Promote pilot programs for Qualified Foreign Limited Partners (QFLP) and Qualified Domestic Limited Partners (QDLP) in foreign-invested equity investment enterprises. Encourage QFLP pilot enterprises to invest in industries aligned with national policy directions, and support QDLP pilot enterprises in investing in high-quality, cutting-edge industries and projects. Explore expanding the scope of QFLP and QDLP investment entities and investment areas, and enhance the flexibility of foreign investment quota management.
X. Promoting the Clustered Development of Equity Investment Institutions.Establish the Ningbo Equity Investment Innovation and Development Demonstration Zone. For equity investment institutions with total profits of 10 million yuan or more in the previous fiscal year, allocate no less than 80% of their municipal-level portion of local comprehensive contribution to the district (county, city) where they are located, to be used for supporting the clustering of institutions and incentivizing high-end talent. Guide equity investment institutions to cluster in innovation and entrepreneurship hubs such as university science and technology parks, technology business incubators, and co-working spaces.
XI. Attracting and Cultivating Professional Talent in Equity Investment. Support equity investment institutions in intensifying efforts to recruit talent and attract outstanding professionals from both domestic and international sources. Encourage the prioritization of policy-based subsidies and rewards for incentivizing management teams. Encourage the adoption of various forms, such as cooperative education programs with domestic and local universities, to strengthen the cultivation of professional talent. Support professionals in the equity investment sector in applying for the Municipal Financial Talent Development Program. Eligible professionals in the equity investment sector will be granted a certain amount of reward in accordance with regulations and may enjoy preferential policies regarding housing, children’s education, and medical insurance.Outstanding equity investment institutions applying for rankings such as the “Entrepreneurship and Innovation Hall of Fame” will be given priority for recommendation.
XII. Optimize the market access environment and business procedures. Launch pilot programs for comprehensive assessment and consultation on private equity funds, and develop the Ningbo Private Equity Fund Comprehensive Management Service Platform. Establish and improve information-sharing mechanisms among market supervision departments, financial regulatory authorities, and industry associations to streamline the establishment and registration change processes for equity investment institutions. Strengthen communication and coordination between regulatory authorities and local governments to enhance processing efficiency.
XIII. Establish investment and financing matching mechanisms. Launch “Ningbo Venture Capital Day” and support equity investment institutions and industry associations in organizing roadshows, forums, and other events in the equity investment sector; encourage localities to build project roadshow platforms that leverage their unique strengths and advantages. Establish a tripartite investment and financing information matching platform involving government departments, equity investment institutions, and the real economy, and promote the platform’s operation as a corporate entity on a regular basis. Enterprises in the city invested in by equity investment institutions will be given priority for inclusion in the city’s pool of enterprises being cultivated for an IPO.
XIV. Expand Market-Based Fundraising Channels.Encourage various market entities, including local listed companies and industry leaders, to invest in local equity investment institutions. Support equity investment institutions in raising funds through multiple channels such as bonds, trusts, and insurance funds. Strengthen cooperation and interaction with national-level funds, central state-owned enterprise funds, and provincial-level funds, and strive to attract them to register in our city, invest in local projects, and support local equity investment institutions. Encourage local financial institutions to collaborate with equity investment institutions on innovative business models such as investment-loan linkage, investment-bond linkage, and investment-insurance linkage to broaden funding sources.
XV. Facilitate Exit Channels for Equity Investments. Launch pilot programs for the transfer of equity investment and venture capital shares, and guide social capital to establish secondary market investment funds for private equity (S-funds). For equity investment institutions that acquire and list fund shares for transfer, provide subsidies equivalent to 30% of the actual transaction fees paid, with a cap of 500,000 yuan per transaction. Promote the trading of state-owned capital fund shares on the market, and support equity investment funds in exiting through methods such as the transfer of investment shares in portfolio companies, negotiated sales, and mergers and acquisitions.Deeply implement the “Phoenix Action” Ningbo Plan to facilitate the exit of enterprises invested in by equity investment institutions through listing, over-the-counter trading, mergers and acquisitions, and negotiated transfers.
XVI. Optimize the credit environment and intermediary service system. Promote the integration of the municipal private equity fund comprehensive management service platform with databases such as the municipal public credit information platform and the China Private Equity Investment Fund Supervision and Service Platform. In accordance with laws and regulations, promote the use of credit information in processes such as government investment fund evaluations, reviews of applications for industrial support policies, and comprehensive analysis and consultation meetings.Improve the system for recording industry violations and illegal activities by equity investment institutions and their personnel; impose credit penalties in accordance with laws and regulations on entities listed on the severe credit default list. Gradually improve the intermediary service system and support intermediaries in providing professional third-party services to equity investment institutions, enterprises with financing needs, and social capital with investment intentions.
XVII. Strengthen Risk Prevention for Equity Investment Institutions. Guide equity investment institutions to conduct investment and operational activities in accordance with laws and regulations, and effectively increase support for the real economy. Explore the establishment of a routine public disclosure mechanism for non-compliant investment institutions, guide commercial banks to strengthen supervision of account activities of equity investment institutions, and ensure the standardized and secure use of client fund accounts. Conduct a comprehensive investigation and cleanup of illegal private equity fund institutions, crack down on various illegal fundraising, fraud, and other unlawful activities in accordance with the law, and resolutely fortify the financial security defense line.
These measures shall take effect on January 15, 2024, and remain valid for five years.
Where the support policies under these Measures overlap with other municipal policies of the same category, the principle of “choosing the higher benefit and avoiding duplication” shall apply.
The term “equity investment institution” as used in these measures includes equity investment management institutions and equity investment funds. An equity investment management institution refers to an enterprise entrusted by venture capital enterprises or equity investment enterprises to engage in equity investment and venture capital management as its primary business. An equity investment fund refers to an enterprise established in accordance with the law that engages in equity investment and venture capital as its primary business.
Equity investment institutions eligible for the support policies under these Measures (excluding those listed in Measure 3) must be registered and filed with the China Securities Investment Fund Association or filed with the Municipal Development and Reform Commission, and must conduct business in accordance with laws and regulations under the supervision of the Ningbo Securities Regulatory Bureau and other relevant authorities.
For equity investment institutions eligible for the support policies under these Measures that involve the Ningbo Municipal Government Guidance Fund, municipal state-owned enterprises, or district (county, city) government guidance funds or state-owned capital participation, when calculating the investment amount in non-listed enterprises within the Ningbo region, the corresponding amount must be deducted in accordance with the reinvestment ratio in the Ningbo region agreed upon at the time of the institution’s establishment.
The total amount of municipal rewards (disbursements) to districts (counties, cities) shall not exceed the new consolidated allocation for the district (county, city) where the equity investment institution is located in the current year.
The specific implementation rules regarding municipal-level fiscal rewards under these measures shall be formulated separately by the relevant departments in conjunction with the Municipal Finance Bureau.
